Valero upgraded to Buy at BofA on widening light-heavy differential

As previously reported, BofA analyst Jean Ann Salisbury upgraded Valero (VLO) to Buy from Neutral with a price target of $179, up from $152. The firm believes a widening of the light-heavy differential should occur over the next 6-12 months as heavier OPEC barrels come to market and displace lighter barrels, adding that it sees such an expected widening benefiting Valero most among its refining sector coverage. The firm believes that a $1.50 per barrel widening of heavy crude next year could add greater than 10% to Valero’s EBITDA next year, the analyst added.